dax potential post brexit rebound in progress 1819032016
<p>Daily Outlook, Tues 28 June 2016 (Click to enlarge charts) What happened earlier/yesterday After a horrendous plunge of 12.5% from last Friday, 24 June Asian […]</p>
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Daily Outlook, Tues 28 June 2016
What happened earlier/yesterday
After a horrendous plunge of 12.5% from last Friday, 24 June Asian session high of 10481 to similar day low of 9161, the Germany 30 Index (proxy for the DAX futures), one of the worst performers in the aftermath of Brexit has managed to find support at the lower boundary of a medium-term “Expanding Wedge” configuration. In addition, yesterday’s low has not breached below last Friday, 24 June low of 9161.
Click here for more details as per highlighted in our latest weekly technical outlook/strategy published yesterday.
Key elements
- Since its 21 April 2016 high, the Index has started to evolve within a medium-term ‘Expanding Wedge” with the recent plunge that has hit the lower limit of the “Expanding Wedge” at 9250.
- The lower limit of the “Expanding Wedge” is just above the medium-term pivotal support of 9120.
- The 4 hour (short-term) Stochastic has turned upwards and still has room for further potential upside before reaching an extreme overbought level. These observations suggest that short-term upside momentum of price action has resurfaced.
- The near-term resistance now stands at 9780/820 which is defined by a confluence of elements (the minor swing high of 24 June 2016, a Fibonacci cluster and a short-term ascending range in place since last Friday low of 9161).
Key levels (1 to 3 days)
Intermediate support: 9250
Pivot (key support): 9120
Resistances: 9780/820
Next support: 8696/580
Conclusion
As long as the 9120 pivotal support holds, the Index is likely to shape a potential rebound within the ‘Expanding Wedge” to target the near-term resistance at 9780/820 in the first step.
However, a break below the 9120 pivotal support may invalidate the preferred rebound scenario for a further direct drop towards the 11 February 2016 swing low area at 8696/580
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